GNC 2008 Annual Report Download - page 165

Table of Contents
The merger agreement required the management services agreement to be terminated on or before the closing of the merger. Our board of
directors and the board of directors of GNC Corporation approved the termination of the management services agreement in exchange for a
one-time payment to Apollo Management V of $7.5 million, representing approximately the present value of the management fees payable for
the remaining term of the management services agreement, which was paid upon closing of the Merger.
Dividend and Discretionary Payments
In November 2006, GNC Parent Corporation paid a dividend totaling $275.0 million to its common stockholders of record. We also made
discretionary payments to each of our employee and non-employee optionholders. Discretionary payments totaling approximately $17.2 million
were made in December 2006 determined based upon the dividend payment per share and the number of outstanding vested option shares
held by each optionholder as of December 15, 2006. We also determined to make discretionary payments based upon the dividend payment
per share and the number of outstanding unvested option shares held by each optionholder following December 15, 2006, which were paid
upon closing of the Merger.
Director Independence
Through a voting agreement, our Parent's stockholders agreement gives each of our Parent's principal stockholders, the right to designate
three members of our Parent's board of directors (or, at the sole option of each, four members of the board of directors, one of which shall be
independent) for so long as they or their respective affiliates each own at least 10% of the outstanding common stock of our Parent. The voting
agreement also provides for election of our Parent's then-current chief executive officer to our Parent's board of directors. Our Parent's board of
directors intends for our board of directors and the board of directors of GNC Corporation to have the same composition, which was put into
place effective March 16, 2007 following the closing of the Merger. Each member of the current board of directors is either an affiliate of one of
our Parent's principal stockholders or one of our executive officers.
Our board of directors has historically had an audit committee and a compensation committee, which have had the same members as the
audit committee and compensation committee of our direct and ultimate parent companies. In connection with the Merger, our board of
directors appointed members to the audit committee and the compensation committee, which are the same members as the audit committee
and compensation committee of our direct and ultimate parent companies.
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